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May donor have endowment moved?

Your Legal Questions Answered

May donor have endowment moved?

Can a donor who set up an endowment at a charity decide they have lost faith in the organization and have that endowment moved to another organization?

Probably not.  The normal rule is that once a donor makes a completed gift to a charity, the donor has no control over it.  Even if the donor imposes specific use restrictions, if the donor did not retain enforcement rights in a gift agreement, the state Attorney General is usually the only person outside the organization who can enforce the restrictions.  The Attorney General is a political animal, does not have unlimited prosecutorial resources, and is unlikely to instigate such a case unless there is a clear breach of the organization’s duty in administering the funds.  The donor’s loss of faith in the organization, without a whole lot more, is not likely cause the AG to act.

A charity sophisticated enough to raise funds for endowment and to enter into gift agreements is not likely to give the donor the right to move the endowment to another agency for any reason, and certainly not for some sort of subjective loss of faith.  The charity may be willing to consult with the donor periodically, particularly if it seeks to exercise a variance power to change the purpose of the gift, but it is very unlikely that it would ever willingly give up control over the gift.

Your best bet, especially if the charity thinks you might be a significant donor in the future, is probably to talk with the leadership, express your concerns and see if you can encourage them to act more like the organization you once supported.  It may not work, but your next endowment gift can go to the organization to which you would have moved your original contribution.

Tuesday, September 23, 2014

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Comments

Another viable option is to open a donor advised fund at a community/public foundation. This can provide the donor protection as to donor intent. 

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